Hamas and the Islamic Jihad Movement in Palestine have received millions in funding over the years thanks to the use of cryptocurrencies. This is supported by research by the Elliptic research group, published by the Wall Street Journal. In particular, only the Jihad Movement, which conducted the attacks on Saturday 7 October together with Hamas, received 93 million dollars to finance its terrorist operations in Israel via Garantex, Russian digital asset trading platforms. Around 1,400 civilians died in the attack and at least another hundred were kidnapped. At least 2,400 Palestinians have died since Israel responded with a wave of attacks in Gaza.
Jihad Movement, Hamas and Hezbollah are the most active groups
Other research groups confirm that cryptocurrencies would be a fundamental tool for financing the terrorist groups involved in the attack on Israel. Other analyzes on money transfers via blockchain would confirm that Hamas, the Jihad Movement and Hezbollah can easily finance themselves through donations and funds received in cryptocurrencies. The blockchain is the public ledger where all digital transactions are recorded.
Through an analysis of decentralized registers, it was found that wallets linked to Hamas received around 41 million dollars in the same period of time. This is at least what was ascertained by research conducted by another cryptocurrency analysis and software company, BitOk, based in Tel Aviv.
These groups, designated by the US government as terrorist groups, do not have access to the international banking system. However, the use of cryptocurrencies would be able to circumvent the limitations. And have access to enough funding to be able to amass weapons and other equipment despite Israeli government control and then launch the most significant violation of its borders since the 1973 Yom Kippur War.
USA: cryptocurrencies to already finance Islamic State and Al Qaeda
Cryptocurrencies – recalls the Wall Street Journal – allow users to bypass banks by instantly transferring tokens between digital wallets, normally stored at a cryptocurrency exchange. The US Treasury Department, in a report last year, said that gaps in financial crime controls at these cryptocurrency exchanges may allow terrorist groups to misuse them, noting that Islamic State and Al Qaeda have both received donations in cryptocurrencies. An old accusation against the crypto world. At least as old as cryptocurrencies themselves, indicated by various regulators as a privileged asset for transferring money in defiance of laws and controls.
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A story within a story, however, is the crypto exchange that would have allowed the three organizations to finance themselves. The research cited by the WSJ refers to Garantex. The United States sanctioned the Moscow-based cryptocurrency exchange last year in an attempt to thwart Russian efforts to circumvent the financial blockade imposed after the invasion of Ukraine. But a year later this platform would be booming. And US sanctions would have had no effect. On the contrary. Transactions on the exchange after the sanctions are said to have tripled to an average of 865 million per month.
Garantex, the platform that would allow you to circumvent sanctions
Despite being blacklisted in the US, which limits transactions with sanctioned entities, Garantex has become a major conduit through which Russians move funds in and out of the country. An analysis of trading data and several people familiar with the company would confirm this to the financial daily. According to US authorities, it has also been a vehicle for Russian cybercriminals to launder their earnings.
In Russia, Garantex would be used to transfer rubles into other currencies. An operation that has been difficult to complete for a year now due to the sanctions imposed on Russian banks after the invasion of Ukraine. Customers – they explain – deposit rubles in cash at Garantex offices to receive cryptocurrencies, mainly in the form of stablecoins. A stablecoin is a particular type of digital currency often pegged to a currency, such as the US dollar. These can then be withdrawn as traditional currency abroad by a network of local partners, with little traceability of the transactions.
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In fact, cryptocurrencies have become a way to circumvent sanctions. And a flaw in Joe Biden’s administration’s strategy to hamper the Russian economy after the invasion of Ukraine. The effect is that Garantex, launched in 2019, is today by far the most popular cryptocurrency exchange in Russia for ruble trading.
In 2022, US authorities estimated that Hamas had assets of $500 million, or about 20% of global terrorist financing. Not all of these funds are cryptocurrencies because the group receives funding in contacts from several countries that support it, such as Iran.